How much are consumers willing to pay for Nintendo's latest console, the Wii U? According to one report, Nintendo thinks they will be more than happy to plunk down $300. According to Forget The Box, "sources closely involved" in manufacturing Nintendo products claim that it costs $180 to make the Wii U and an additional $50 for the tablet controller. Because of that, the sources say, Nintendo will set the retail price of the Wii U at no less than $300.
"Nintendo chose an economical GPU and CPU that could keep up with the performance of today's current consoles, but keep hardware costs down to maximize profits," a source tells Forget The Box. "Nintendo got a bargain price on the custom GPU and CPU that the Wii U uses. There is a bigger focus on downloadable content, applications, video content, digital distribution, and services to create a stream of revenue. Investors will be ecstatic with the news."
Last year Nintendo president Satoru Iwata reportedly told Japanese newspaper Nikkei that the Wii U would likely cost more than $250 when it launches.
We do not know if Nintendo plans to take a hit on its profits to make the price more palatable to consumers, but analysts believe the sweet spot is somewhere near $250 per unit. If the report about the costs of manufacturing the new console are true, at the end of the day (when you factor in all the other costs like packaging and advertising) Nintendo will have to balance its need to make a profit with getting a large installed user base at launch.
We will continue to follow this story as it develops. Nintendo has not conformed or denied this story. We suspect an official price will be announced later this year – perhaps during E3 in the summer.
Source: GamesIndustry International